Exclusive: Mitt and Ann Romney talk VP decision, US economy

This is a rush transcript from "Hannity," June 19, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Tonight, there are major developments from the campaign trail of Michigan. Now, a short time ago the presumptive Republican nominee for president announced that despite media reports to the contrary, he is in fact considering Florida Senator Marco Rubio as his running mate. Let's take a look.

(BEGIN VIDEO CLIP)

MITT ROMNEY, R-PRESIDENTIAL CANDIDATE: There was a story that originated today apparently at ABC based upon reports of supposedly outside unnamed advisers of mine. I can't imagine who such people are, but I can tell you this, they know nothing about the vice presidential selection or evaluation process. There are only two people in this country who know who are being vetted and who are not. And that is Beth Myers and my myself. And I know Beth well. She doesn't talk to anybody. The story was entirely false. Marco Rubio is being thoroughly vetted as part of our process.

(END VIDEO CLIP)

HANNITY: Now prior to that bomb shell announcement, I sat down with both Mitt and Ann Romney to talk about these erroneous media reports and much, much more. Let's take a look at my exclusive interview with the Romneys from the historic Frankenmuth Woolen Mill, it's in Michigan.

(BEGIN VIDEOTAPE)

HANNITY: Governor Romney, Ann Romney, great to see you. I appreciate you taking time to be with us today.

Governor, here you are, 140 days to go to Election Day. A defining decision is coming up pretty soon, and that is who will be your running mate. What are you going to be looking for in the person that you choose to run with you?

M. ROMNEY: Well, by far the most important factor is whether this is a person who could lead the country if that were necessary. Fortunately, there are a number of good men and women in my party that would meet that test. But that is the most important element. Would the American people and would I see this person as someone who could lead in that kind of eventuality.

HANNITY: What did you make of the ABC News report this morning that said Marco Rubio was not being vetted but Governor Tim Pawlenty was being vetted. Any comment on that story?

M. ROMNEY: I get a kick out of some of the speculation that goes on. And I'm not going to comment on the process of course. But I can tell you this, only Beth Myers and I know who is being vetted.

HANNITY: Even Ann Romney doesn't know?

M. ROMNEY: Even Ann doesn't know. We talk about the possible that people I might select but in terms of who is actually being vetted, that is something only two people know, and Beth Myers doesn't talk.

HANNITY: Is there a short list?

M. ROMNEY: Well, there are number of people who are being vetted and that's obviously the group that we are considering most seriously.

HANNITY: One of the things people have suggested is it might be unique, different to make that announcement early, before the -- just before the convention to sort of give a little breathing room for the candidate to get adjusted to life in the public eye as you have now been experiencing for over a year and a half. Would that be something you would consider?

M. ROMNEY: You know, I will consider a wide range of options. At this stage I haven't made a decision as to who it will be or when it will be announced. More traditionally, it's announced around the time of the convention and there are advantages of doing that I'm sure. But I'll keep open in terms of my thinking on when we will make the announcement.

HANNITY: OK. The president last week has been speaking a lot about the economy. A week and a half ago he said that the private sector is fine. Then he gave another speech on the economy and he went through a whole laundry list of areas where Republicans would cut Head Start. Republicans would cut, you know, senior citizens funding. They would cut early education for children. That Republicans, their plans would ultimately result in dirtier air and water. David Plouffe said this weekend that Republicans want more war. What is your reaction when you hear that from the president and his campaign?

M. ROMNEY: Well, I think the president is looking with some desperation to find a message that somehow will allow him to get re-elected. Those messages won't work any better than the ones of the last few weeks. He really doesn't have a narrative that suggests why he should be the president for four more years. His policies in the first three and a half years have disappointed people all over the country. Minority populations have been hit hardest, but other Americans as well are really struggling under his policies.

In fact, he, of course, did not cause the downturn but his policies have made it harder for the economy to recover. They have lengthened the time under which the American people have been struggling. I believe in a very different course for America. I laid that out. We know where he has led us. It is not the kind of place America wants to go.

HANNITY: Now, since President Obama has taken office, we have $5 trillion in new debt. We borrow 40 cents of every dollar. How could -- if you become president and we know that one of the things you are going to do is cut spending by five percent from day one, how could you get this country to a balanced budget when we borrow so much money at this point? Forty cents of every dollar.

M. ROMNEY: Well, the good news is, you don't have to do it entirely in the first year. Meaning, you don't have to take out a trillion dollars in year one spending. In fact, doing that could cause us to have an economic slowdown that would put a lot more people back to work -- out of work. So, what you have to do is take action in the first 100 days of the first year that eliminates programs which if you didn't get rid of them would take a larger and larger share of the deficit.

So, what you're going to have to do is number one, get rid of ObamaCare. We can't afford it. It is not a good piece of legislation. It saves $100 billion a year to get rid of it. Number two, you get rid of some other programs that we like but we simply just can't go out and keep borrowing money from China to pay for them.

And so, eliminate programs. Number two, take other programs that are helpful that we do like but that nonetheless could be run more efficiently at the state level. Cap their growth at the rate of inflation or perhaps in the case of something like Medicaid at inflation plus one percent. You do that, you save another $100 billion a year plus by growing these programs at the rate of inflation.

And then finally, you reduce the number of federal employees with attrition, overtime. You do those things and by eight to 10 years, America has a balanced budget and now you start generating the kind of returns that allow us to start paying down the debt.

HANNITY: One of the things Mrs. Romney, you were telling me earlier. We have 47 million Americans on food stamps. Nearly double the number than when President Obama took office. We have 26 million Americans underemployed. We got 39 percent of people's wealth --meaning the money that they saved over a lifetime -- has been lost in a three year period. You talk to a lot of people on the campaign trail. What are they telling you about their economic situation?

ANN ROMNEY, WIFE OF GOVERNOR ROMNEY: Well, it is actually quite interesting because the contrast has been so stark. Because this is our second time around and four years ago this is not what we were hearing, but now every single message that we are hearing is about the economy. Whether they are worried about their own jobs, their husband's jobs, their son's job. They are worried in addition -- which is interesting to me -- about deficit spending. Because Americans like fairness, and beyond anything else we love our children. And we love giving our children a brighter future than what we have and what we are hearing from everyone is that they recognize that their children will not have a brighter future, that they're going to be burdened with our debt. The bills that we are racking up right now, our kids are going to have to pay for, and they are very upset about that and, you know, they just want someone to, please, come in and save this, I mean, please do something. It's the desperation that they feel.

HANNITY: They feel desperation. Really, people come up to you because it seems that you are out there connecting with a lot of people. If you had to pick one word, the word would be they seem desperate to you.

A. ROMNEY: And the words they use most frequently are, please save the country. And if you want to go even further, it's please gave my children's future. And that's what I'm hearing from women.

HANNITY: Yes. What about the issue of the third rail. Every time a politician says they're going to save Social Security or Medicare. If Paul Ryan says it it's a Paul Ryan lookalike throwing granny over the cliff. Isn't it true that we'd really get to a balanced budget, we've got to deal with entitlements. Is it possible to do that in a political atmosphere where anybody that makes such a suggestion will be demonized in such a way?

M. ROMNEY: Well, what I think a lot of people forgetting is there is only one president in history that's cut Medicare by $500 billion, and that is President Obama. He somehow points at Republicans and says that we are do doing something wrong by talking about how to save these programs and make sure they are solvent for coming generations, but he is the guy that cut Medicare by $500 billion. I see people holding up signs now and then, "Don't touch my Medicare." It's like, hey, I'm not touching your Medicare. It is the guy you've got in office that cuts your Medicare by $500 billion.

My plan lets people keep Medicare, if they want traditional Medicare or have an option to get private based health care, we give people the premium support program so they can make a choice and lower income people get more help, so they can get a more robust plan and higher income people will have to pay more of their way. We save Medicare.

But Sean, let's also not forget. We are talking now about what we have to do to balance the budget. Cutting spending is one part but the more important part is growing the economy. Growth is the way that we get to a balanced budget. Growth is also the way we get people back to work. Growth is the way we get wages rising again.

So my policies are not just finding ways to reduce the size of government, and important as that is, they are also finding ways to get the private sector growing again, putting people back to work and getting incomes up.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity." Now earlier today, I traveled to Michigan to catch up with the presumptive Republican nominee for president Mitt Romney as well as his wife Ann. And now here is more of our conversation.

(BEGIN VIDEOTAPE)

HANNITY: The president hit a milestone this week. His 100th round of golf. And Mrs. Romney, you came up with the line and you said, you would not be taking as extravagant and as many vacations you said in a recent interview. Do you think the president has lost touch? I will ask both of you.

A. ROMNEY: Well, you know, for us how we see the future, it is imperative that Mitt win. It's not even like a choice anymore. I think people -- it's gotten so defined in so many people's minds that this is an absolute critical election, and that there are those in the other party that don't understand what is going on and to say comments like what we heard the past few weeks where they don't understand how the middle America is really struggling. And so for me, you know, we are out there. We are hearing it. We are feeling it. It is not even that we are hearing it. You can just feel it. It is in the air. And there is just something happening out there that is we are not going to go with four more years of this. We want change and we want a new direction.

So, you know, I'm just sensing it and feeling it and --

HANNITY: You feel a different, I guess -- you are just getting a different feel than what you felt in 2008 maybe when you are out with Senator McCain.

A. ROMNEY: Very different.

HANNITY: Well, you know, Joe Biden said that the greatest cities are in China, not the U.S. I'm sure you take issue with that, Governor.

R. ROMNEY: Absolutely. Look, this country is unique. It's exceptional. It has done more to free people from tyranny than any nation on Earth. The policies of free enterprise and freedom and opportunity being copied in various places around the world are fortunately lifting hundreds of millions out of poverty. I mean, this nation is extraordinary in the history of the earth. And you talk about the president potentially being out of touch. Of course he is out of touch. He is out of touch in part because he never had the experience of working in the private sector and seeing what it takes to start a small business. How a business decides to grow. When they decide to shrink. When they decide to send jobs overseas. He doesn't understand that. It is core because he hasn't lived it.

And then of course in the bubble of the White House, it is hard to find out what is going on around the nation. His comments show how out of touch he has been. Frankly, you know, when he came into office with some people out of work and somebody falling out of work, he should have gone on a jobs tour instead of an apology tour. Should be around the country meeting with employers and asking them, what do we have to do to make it easier for you to hire people? What do we have to do to get jobs to come back in America?

Everything in his lexicon relating to employment and job creators relates to punishment of some kind. How could we penalize you for doing things we don't like? No Mr. President, make America the best place in the world for small business and you will see jobs again.

HANNITY: You said he is the most anti-jobs president in modern history. But let me ask you next about immigration. The president through executive order did something that he himself in 2011 said, he didn't have the authority to do and that is not enforce the laws on the books as it relates to people that are in this country illegally. Two sides to this. Do you believe it is constitutional? And substantively, where do you come down on the issue?

ROMNEY: Well, with regards to the law, does he have the capacity to do what has been proposed or what he has asked the Department of Homeland Security to do. That's something we're going to let the lawyers and I presume it will be challenged in the courts determine.

My own view is, we need to have a long-term solution for those that have come here illegally having been brought by their parents. So, through no fault of their own they are here. They have gone to school here. How do we deal with these folks, what is their long-term course in America? And that requires a long term solution. He described what he did as a stop gap measure. These kids don't want a stop gap measure. They want some permanence in understanding what their status is going to be.

My own view is, with regards to illegal immigration, we have to secure the border first, we have to have an employment verification system and number three, we have to give these kids an understanding of what their long-term future in America will be and those that serve in the military, for instance, I think should be given the green card with the occasion to stay in this country the rest of their life if they would like to.

HANNITY: Governor, we now see Egypt has been taken over by the Muslim Brotherhood. We see what is happening in Iran. Overall, just a broad general view, America's foreign policy now and what changes you would implement if you get elected and how concerned are you that Iran gets a nuclear weapon?

ROMNEY: Well, the biggest threat that we face as a nation is, of course, a nuclear Iran. And the president's highest priority from a foreign policy standpoint has to be to push back against Iran and to keep them from having the material which they could use to create a weapon or they could use to provide to Hezbollah or to some other of their surrogates that ultimately could bring it to Latin America or to North America. And it is an unthinkable setting to be held hostage by Iran.

There is a glimmer of hope which is that Syria -- which is Iran's only ally in the Arab world -- their route to the sea, their route to arm Hezbollah and Lebanon, Syria is now in turmoil. And remarkably, the President having given Russia what they wanted -- removal of our missile defense sites from Eastern Europe -- did not get in return the kind of commitments, the reset that he's spoke about did not get anything from that. We now have Russia protecting apparently Syria. The president ought to be working very aggressively to encourage our friends there, the Turks and the Saudis to be providing the elements that the insurgents need in Syria to provide freedom to the people there. This is an extraordinarily high priority and opportunity for us to push back against the plans of Iran to become the hegemon of the region. And at the same time, we have to be preparing in this nation the kind of military options that might be necessary if Iran were to pursue their nuclear folly.

(END VIDEOTAPE)

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